2022 World Cup Helps Subscribers Flock To Peacock: Does Comcast Have A Hit Revenue Driver?

Media and cable giant Comcast Corporation CMCSA reported fourth quarter and full fiscal year financial results before market open Thursday. One of the key highlights of the report was the impact of the streaming platform Peacock and the potential contribution from the 2022 FIFA World Cup.

What Happened: Comcast reported full-year revenue of $121.4 billion, with NBC Universal's revenue hitting $39.2 billion thanks to the strong growth of the Peacock streaming platform.

Peacock paid subscribers hit more than 20 million in the U.S. at the end of the fourth quarter, which had more than doubled in the past year. The company said it added five million net new subscribers for Peacock.

The company cited live sports, the addition of Universal Pictures movies and Peacock originals as the reason for the strong results. This marked the best quarterly result for Peacock since it launched in 2020.

Peacock had revenue of $660 million in the fourth quarter and $2.1 billion for the full fiscal year. Revenue for the full year was nearly triple on a year-over-year basis the company said.

Comcast said advertising revenue was up 4% in the fourth quarter thanks to the FIFA World Cup and strong advertising revenue from Peacock.

Benzinga previously highlighted Comcast as a potential beneficiary of the 2022 FIFA World Cup which saw the return of Team USA after missing the tournament in 2018. The company had streaming rights to the matches in the U.S. on Peacock and aired the Spanish language rights to games on Telemundo.

The fourth quarter results highlighted the impact the 2022 FIFA World Cup might have had on the company and the value of sports content that could help Peacock land and maintain subscribers in the future.

Other items that helped were the move of some NBC and Bravo content that was previously available on Hulu moving to be exclusive to Peacock.

NBCUniversal also had several hit movies in 2022 including “Jurassic World: Dominion” and “Minions: The Rise of Gru,” which ranked fifth and sixth, respectively, for 2022 domestic box office performance.

“Halloween Ends” was released on Peacock simultaneously with its theatrical release, which showcased the continued push by Comcast to have content exclusive to Peacock and be a strong player in the theatrical movie industry.

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What’s Next: The streaming market remained highly competitive and Peacock was one of many fighting to gain market share from competitors such as Netflix Inc NFLX and others.

Peacock has live sports that include English Premier League, golf, WWE, IndyCar and the highly coveted Sunday Night Football. While many streaming platforms are aggressively pursuing sports rights, Netflix hesitated to get into the sports market, which offers opportunities for companies such as Comcast.

With opportunity comes costs, as Comcast reported an adjusted EBITDA loss of $978 million for Peacock in the fourth quarter. Spending on the Peacock platform could hit $3 billion in 2023.

“We will hit our peak spend this year and then improve steadily from there,” NBCUniversal CEO Jeff Shell said.

Shell said NBC wouldn’t be investing in Peacock if it didn’t see future growth ahead.

Another item to watch for Comcast and its streaming aspirations moving forward is the company’s 30% stake in Hulu, a streaming platform majority owned by Walt Disney Co DIS.

Around a year from now, Disney has the right to acquire the 30% stake in Hulu it doesn’t own at market value. Some analysts and activist investors believe Disney will work to get a deal done sooner than later at potentially a better price.

Comcast could have an opportunity to cash in on the stake and use the money on content for Peacock or it could acquire Hulu outright with Disney looking to cut costs and deepen its streaming aspirations.
One option based on the successful results boosted by the FIFA World Cup would be to take the money from Disney buying out the Hulu stake and put it towards sports rights to increase its live sports content, which performed well.

The other item to watch based off of Comcast’s quarterly report — and the citing of the 2022 FIFA World Cup boosting advertising revenue and subscribers — is for investors to watch Fox Corp FOXFOXA.

Fox had the rights to broadcast the 2022 World Cup in the U.S. and had strong viewership for College Football and NFL games. The company will broadcast Super Bowl LVII on Feb. 12. Fox will report second-quarter earnings on Feb. 8.

CMCSA Price Action: Comcast shares were trading down 0.19% at $40.03. Shares are down 17% over the past year but have gained 13% year-to-date in 2023. Comcast shares have traded between $28.39 and $50.98 over the past 52 weeks.

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Photo: Daniel J. Macy via Shutterstock